U.S. home prices continue rise -- along with mortgage rates

Rising home price tags were highest in Seattle, Portland and Denver, new market data shows.

By Doug G. Ware

New market data released by the S&P CoreLogic Case-Shiller
Indices on Tuesday showed U.S. home prices continued to rise, by 5.6
percent, between October 2015 and 2016. The climbing prices reflect
various economic improvement, experts said, but did not include rising
mortgage interest rates that took hold in November. File Photo by
Alexis C. Glenn/UPI

| License Photo

Home prices in the United States continue to rise, according to market data released Tuesday.

The S&P CoreLogic Case-Shiller Indices showed a 5.6 percent increase
in home prices for the 12 months that ended in October, up slightly
from the record yearlong growth mark notched the month before.

The indices, which measure home sales in
markets across the United States, showed that the greatest price
increases have occurred in the West and Northwest. Seattle notched the
highest price spike (10.7 percent) from October 2015 to October 2016. Portland (10.3 pct), Denver (8.3 pct) and Dallas (8.1 pct) saw the next largest hikes.

Nationally, the sliding 12-month price scale increased just 0.02 percent from September to October, but the spike was more pronounced in certain U.S. markets. Atlanta saw a 1.4 percent seasonally-adjusted rise in that span of four weeks, followed by Cleveland (1.3), Tampa (1.2), and Dallas and San Francisco (1.0).

"Home prices and the economy are both enjoying
robust numbers," David Blitzer, managing director at S&P Dow Jones
Indices, said in a statement Tuesday.

While the numbers reflect continued growth in
overall sales, they don't reveal the potential impact of higher mortgage
interest rates that arrived just outside the indices' October scope.

"Mortgage interest rates rose in November and
are expected to rise further as home prices continue to outpace gains in
wages and personal income," Blitzer added.

The November-to-November figures, and the effect of the new interest rates, won't be seen until the end of January.

The Case-Shiller 10-city composite has gained 4.3 percent from last year and the 20-city index rose 5.1 percent -- both slight increases from September, Tuesday's data showed.

Home prices in the United States have been on
the rise since they bottomed out in February 2012, and experts say
improved domestic economic indicators mean it's unlikely they will begin
falling anytime soon. However, fundamental data suggest they will level
off at some point in the near-term.

"With the current high consumer confidence
numbers and low unemployment rate, affordability trends do not suggest
an immediate reversal in home price trends," Blitzer said.
"Nevertheless, home prices cannot rise faster than incomes and inflation
indefinitely."

U.S. home prices continue rise -- along with mortgage rates
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